Chinese Premier outlines new anti-corruption strategy

Worldwide, governments are beginning to bring down the hammer on corporate corruption. U.S. enforcement of Foreign Corrupt Practices Act policies has increased. Brazil passed an Anti-Corruption Law. And now, Chinese Premier Li Keqiang has laid out his own plan for fighting corruption within the country’s government.

In remarks released in full on Feb. 23, Li told a meeting of the State Council, China’s cabinet, on Feb. 11 that the government’s power over markets and business are a key reason for rampant corruption. He said bidding for construction projects, land-use contracts, and mining rights are three areas that have been prone to corruption.

To fight this trend, Li said, the key is better standardized processes that leave little room for interpretation or bribery. The Premier stated that “leading cadres should not meddle.”

Since becoming the head of Chinese Communist Party leadership in 2012, the Wall Street Journal says that Li has joined Chinese President Xi Jinping pledging to attack corruption within the government and the party. This has resulted in multiple company officials and executives being detained on bribery charges. However, as only some of these officials have been prosecuted publicly, some legal reformers have questioned the overall effectiveness of the campaign.

In his remarks, Li acknowledged these criticisms, saying that public supervision of high-ranking officers is an effective way to cut down on corruption. “Openness is the most powerful anticorruption measure,” Li said.

For in-house counsel, this increased focus on stopping corruption means to take extra precautions with all business dealings within China. Mead Johnson Nutrition Co. has already run into trouble with a Chinese subsidiary, having announced that the company may have violated the FCPA in its dealings with the Chinese government. In addition, the company paid $33 million in penalties after being ensnared in an industry-wide antitrust probe in China in 2013.

For more on bribery and how it is affecting in-house counsel, take a look at these InsideCounsel stories: